With uncertain economic times, volatile markets, and rapidly changing business priorities, business leaders must focus on safe, long-term strategies to mitigate risk and secure investments. In the wake of tighter budgets, high-dollar investments in sourcing and procurement have become highly scrutinized.
According to the Gartner® Strategic Planning: Assessing the Risk and Value of Procurement Applications report, investments in procurement solutions are critical for the flexibility and credibility of high-performance organizations. But Gartner recommends starting small and focusing on critical business requirements.
Here’s a quick rundown of the Gartner recommendations for modernizing procurement and strategic sourcing applications. You can read the full report here.
Companies with the strongest building blocks can weather any storm, especially financially. Prioritizing the success of critical business requirements offers a foundation for generating long-term, high-value returns. An investment foundation is achieved with quick wins, low implementation costs, and observable savings that procurement applications provide.
It’s critical to start small and focus on critical business requirements. Gartner maintains that immediate returns at the outset are essential for long-term success—recommending procurement applications to reduce risk and match business needs while driving faster results. Quick wins lay the groundwork for future investments and business transformation.
Whether an organization is just starting a procurement program or updating solutions for sourcing its investments, business leaders must prioritize investment strategies that relieve immediate pain points. Optimized purchasing workflows, automated compliance management, and improved vendor communication reduce risk and increase savings. Procure-to-pay automation streamlines these processes, helping organizations reduce errors, negotiate better prices with their suppliers, and support cash flow strategies.
Investment solutions that generate long-term profit do so with low set-up costs and quick implementation. “Faster is better” is a simple enough recommendation, but accelerating returns is imperative. Gartner affirms that investment solutions should be implementable in six months or less and impact systems with limited integrations. Once implemented, procurement solutions can also save time by streamlining and automating the requisition and approval processes. Gartner assesses that procurement solutions are affordable, requiring no deep system integrations.
Above all else, the best solutions deliver observable savings, boost credibility, and strengthen an organization's cooperative capabilities. Investing partners are watching the bottom line. With that in mind, Gartner recommends steering clear of supplier performance management and investing in procurement solutions instead. While supplier performance management may appear easy, it often fails due to the required buy-in from non-procurement stakeholders.
Procurement solutions give organizations greater visibility into their spend analytics and e-sourcing, allowing them to track costs, identify trends, and make more informed decisions. Procurement solutions also increase vendor communication visibility, helping organizations build credibility with stakeholders and identify cost-saving opportunities. As businesses prepare for an uncertain 2023, the efficiency of critical business operations is always a sound investment.
Download the full report from Gartner here to learn how short-term results from procurement solutions can help drive long-term profits for your organization.
Gartner, Strategic Planning: Assessing the Risk and Value of Procurement Applications, Micky Keck, Refreshed 25 November 2021, Published 28 May 2020.
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Watch this on-demand session to hear Kate Denissova (Director of Procurement Advisory at The Hackett Group) and Ed Sawma (VP of Marketing at Zip), discuss the ways to work towards 100% employee adoption of financial policies.read more